Review: Small Giants

Title: Small Giants
Author: Bo Burlingham
Publisher: Portfolio
Pages: 225
ISBN: 1-59184-093-7

Growth has been the mantra of business more than a hundred years now. Generations of business school students have had this mantra ingrained into them. Growth is good. Not growing means stagnation and stagnation leads to decline and ultimately the disappearance of the firm. Business is a Machiavellian struggle to become and remain a giant global company which bestrides the Earth like a colossus.

However, perhaps there is another way. Small Giants by Bo Burlingham is an important book in this regard. Unending relentless growth is not the only way forward. There are companies which choose another path and which succeed brilliantly on their own terms. Before looking at what those terms may be, it is perhaps relevant to look at what the basic implication of growth at all costs is.

How can a company grow? A simple question that has generated reams of paper outlining in great detail exactly how the company will grow. Essentially speaking, growth can come either by increasing the number of units sold; whatever those units may be or by increasing the price at which those units are sold or by a mixture of both. Practically speaking, price increases are inevitable in an inflationary environment. The price has to be increased at atleast the inflation level to avoid a loss of profitability. However, the ability to increase prices is limited by the perceived cost/benefit ratio that the end consumer has for the company's product. Many companies have learned to their cost that if the perceived cost/benefit ratio becomes too skewed towards the cost side, then their consumers tend to switch to competitive and/or substitute products. There are very few products that have no effective substitutes (oil being a prominent example that comes to mind). So if the ability to raise prices is limited, then the number of units sold has to be increased. This in turn means either selling more to the existing consumers and or bringing in new consumers or a mixture of both. As a company increases in size, the imperative to grow also increases driven partly by an increase in cost base while at the same time greater effort is needed to achieve this growth.

The companies included in Mr. Bo Burlingham's book have forged a different path. They have shown that it is possible to have a great company without getting onto the treadmill of growth. These companies span a variety of industries and corporate structures. They have a large number of techniques and strategies to keep themselves relevant to and engaged with their consumers. All of them show that it is possible to build a company great opportunities both to customers and to employees. Indeed, for many the primary focus is not customers but employees. It is possible to forge another path and these companies show the way. Every business can learn something from the example of these companies.

Title: The World Without Us
Author: Alan Weisman
Publisher: Virgin Books
Pages: 311
ISBN: 978-0-7535-1357-6

Here is an interesting thought experiment: if humans are suddenly removed from the Earth somehow while leaving everything else intact, how will the artifacts of our civilization fare? The author of this title, Mr. Alan Weisman, takes this thought experiment and runs with it.

We have built a globe girdling civilization with massive and seemingly permanent monuments to our ingenuity. We are pushing materials and structures to their very limits. Witness the current race in building the tallest skyscraper in the world. No sooner has one behemoth been built, then another even bigger one starts construction. We have thrown a network of roads and wires and pipes around the world and built personal transportation devices by the millions to take advantage of this infrastructure. Whole mountains have been leveled in our quest for the raw materials that lie at the foundation of our civilization. Countless ships crisscross the oceans carrying the goods of our commerce within them while in the air, countless airplanes do the same carrying us to and fro across the globe.

Yet according to Mr. Weisman, with us gone nearly all these achievements will be undone in short order by nature. Some of our most impressive and advanced works will be the first to go. In a surprisingly short time, nature will reclaim her own. However, our impact will still be felt far into the future. Our civilization has a dark underside to it; that is the pollution that we have (often inadvertently) caused. This pollution can be seen as a necessary accompaniment to our progress and often it is assumed that over time, even the most durable of substances will break down. However this is not necessarily true. We have introduced substances that have never before been seen in nature. As a result, no organism has adapted itself to break them down. In a sense, these will remain in the environment essentially forever or atleast until some organism learns the trick of breaking them down. The biggest culprit in this regard is the now ubiquitous plastic which breaks down into finer and finer parts until finally there is a microscopic part left that simply remains in the environment. Other pollutants include radioactive substances which have extremely long half lives. This is something that nature will have to cope with somehow after we are gone.

One answer to the thought experiment raised above is that with us gone, the world will revert to the pristine state in which it was before we came. However, as Mr. Weisman has shown, this is simply not the case. We have made an impact (and a massive one) on our environment. The consquences of this impact will be felt far far into the future.

This is a very good book to read. It raises important questions about the consequences of our actions on the planet. Perhaps these questions can stimulate us into better behavior vis a vis our environment than we have done in the past.